THIRD DIVISION

[G.R. No. 189776. December 15, 2010.]

AMELIA P. ARELLANO, represented by her duly appointed

guardians, AGNES P. ARELLANO and NONA P. ARELLANO , petitioner,
vs . FRANCISCO PASCUAL and MIGUEL PASCUAL , respondents.

DECISION

CARPIO MORALES , J : p

Angel N. Pascual, Jr. died intestate on January 2, 1999 leaving as heirs his
siblings, namely: petitioner Amelia P. Arellano who is represented by her daughters 1
Agnes P. Arellano (Agnes) and Nona P. Arellano, and respondents Francisco Pascual
and Miguel N. Pascual. 2
In a petition for "Judicial Settlement of Intestate Estate and Issuance of Letters
of Administration," docketed as Special Proceeding Case No. M-5034, led by
respondents on April 28, 2000 before the Regional Trial Court (RTC) of Makati,
respondents alleged, inter alia, that a parcel of land (the donated property) located in
Teresa Village, Makati, which was, by Deed of Donation, transferred by the decedent to
petitioner the validity of which donation respondents assailed, "may be considered as
an advance legitime" of petitioner.
Respondent's nephew Victor was, as they prayed for, appointed as Administrator
of the estate by Branch 135 of the Makati RTC. 3
Respecting the donated property, now covered in the name of petitioner by
Transfer Certi cate of Title No. 181889 of the Register of Deeds of Makati, which
respondents assailed but which they, in any event, posited that it "may be considered as
an advance legitime" to petitioner, the trial court, acting as probate court, held that it
was precluded from determining the validity of the donation.
Provisionally passing, however, upon the question of title to the donated property
only for the purpose of determining whether it formed part of the decedent's estate, 4
the probate court found the Deed of Donation valid in light of the presumption of
validity of notarized documents. It thus went on to hold that it is subject to collation
following Article 1061 of the New Civil Code which reads: 5 THEDCA

Every compulsory heir, who succeeds with other compulsory heirs, must bring into
the mass of the estate any property or right which he may have received from the
decedent, during the lifetime of the latter, by way of donation, or any other
gratuitous title in order that it may be computed in the determination of the
legitime of each heir, and in the account of the partition.

The probate court thereafter partitioned the properties of the intestate estate.
Thus it disposed:
WHEREFORE, premises considered, judgment is hereby rendered declaring that:

1. The property covered by TCT No. 181889 of the Register of Deeds of

CD Technologies Asia, Inc. © 2016 cdasiaonline.com
 Makati as part of the estate of Angel N. Pascual;

2. The property covered by TCT No. 181889 to be subject to collation;

3. 1/3 of the rental receivables due on the property at the mezzanine and the
3rd oor of Unit 1110 Tanay St., Makati City form part of the estate of
Angel N. Pascual;

4. The following properties form part of the estate of Angel N. Pascual:

a. 1/3 share in the House and Lot at 1110 Tanay St., Rizal Village
Makati TCT No. 348341 and 1/3 share in the rental income thereon;

b. 1/3 share in the Vacant Lot with an area of 271 square meters
located at Tanay St., Rizal Village, Makati City, TCT No. 119063;
c. Agricultural land with an area of 3.8 hectares located at Puerta
Galera Mindoro covered by OCT No. P-2159;

d. Shares of stocks in San Miguel Corporation covered by the

following Certi cate Numbers: A0011036, A006144, A082906,
A006087, A065796, A11979, A049521, C86950, C63096, C55316,
C54824, C120328, A011026, C12865, A10439, A021401, A007218,
A0371, S29239, S40128, S58308, S69309;

e. Shares of stocks in Paper Industries Corp. covered by the following

Certi cate Numbers: S29239, S40128, S58308, S69309, A006708,
07680, A020786, S18539, S14649;

f. 1/4 share in Eduardo Pascual's shares in Baguio Gold Mining Co.;

g. Cash in Banco De Oro Savings Account No. 2 014 12292 4 in the

name of Nona Arellano;

i. Property previously covered by TCT No. 119053 now covered by TCT

No. 181889, Register of Deeds of Makati City;AHDaET

j. Rental receivables from Raul Arellano per Order issued by Branch 64

of the Court on November 17, 1995.

5. AND the properties are partitioned as follows:

a. To heir Amelia P. Arellano — the property covered by TCT No.

181889;

b. To heirs Francisco N. Pascual and Miguel N. Pascual — the real

properties covered by TCT Nos. 348341 and 119063 of the Register
of Deeds of Makati City and the property covered by OCT No. 2159,
to be divided equally between them up to the extent that each of
their share have been equalized with the actual value of the property
in 5(a) at the time of donation, the value of which shall be
determined by an independent appraiser to be designated by Amelia
P. Arellano, Miguel N. Pascual and Francisco N. Pascual. If the real
properties are not suf cient to equalize the shares, then Francisco's
and Miguel's shares may be satis ed from either in cash property or
shares of stocks, at the rate of quotation. The remaining properties
shall be divided equally among Francisco, Miguel and Amelia.
(emphasis and underscoring supplied)
CD Technologies Asia, Inc. © 2016 cdasiaonline.com
 Before the Court of Appeals, petitioner faulted the trial court in holding that:
I

. . . THE PROPERTY DONATED TO APPELLANT AMELIA PASCUAL ARELLANO IS

PART OF THE ESTATE OF ANGEL PASCUAL, JR.

II

. . . THE PROPERTY DONATED TO APPELLANT IS SUBJECT TO COLLATION

UNDER ARTICLE 1061 OF THE NEW CIVIL CODE.

III

. . . APPELLEES WHO ARE MERELY COLLATERAL RELATIVES OF DECEASED

ANGEL N. PASCUAL, JR. AS HIS COMPULSORY HEIRS ENTITLED TO LEGITIMES.
xxx xxx xxx

and
V

. . . IN NOT PARTITIONING THE ESTATE OF ANGEL N. PASCUAL, JR. EQUALLY

AMONG HIS LEGAL OR INTESTATE HEIRS. 6 (underscoring supplied)

By Decision 7 of July 20, 2009, the Court of Appeals found petitioner's appeal
"partly meritorious." It sustained the probate court's ruling that the property donated to
petitioner is subject to collation in this wise:
Bearing in mind that in intestate succession, what governs is the rule on equality
of division, We hold that the property subject of donation inter vivos in
favor of Amelia is subject to collation . Amelia cannot be considered a
creditor of the decedent and we believe that under the circumstances, the value of
such immovable though not strictly in the concept of advance legitime, should be
deducted from her share in the net hereditary estate. The trial court therefore
committed no reversible error when it included the said property as forming part
of the estate of Angel N. Pascual. 8 (citation omitted; emphasis and underscoring
supplied) ACETSa

The appellate court, however, held that, contrary to the ruling of the probate
court, herein petitioner "was able to submit prima facie evidence of shares of stocks
owned by the [decedent] which have not been included in the inventory submitted by
the administrator."
Thus, the appellate court disposed, quoted verbatim:
WHEREFORE, premises considered, the present appeal is hereby PARTLY
GRANTED. The Decision dated January 29, 2008 of the Regional Trial Court of
Makati City, Branch 135 in Special Proceeding Case No. M-5034 is hereby
REVERSED and SET ASIDE insofar as the order of inclusion of properties of the
Intestate Estate of Angel N. Pascual, Jr. as well as the partition and distribution of
the same to the co-heirs are concerned.
The case is hereby REMANDED to the said court for further proceedings in
accordance with the disquisitions herein. 9 (underscoring supplied)

Petitioner's Partial Motion for Reconsideration 1 0 having been denied by the

CD Technologies Asia, Inc. © 2016 cdasiaonline.com
 appellate court by Resolution 1 1 of October 7, 2009, the present petition for review on
certiorari was filed, ascribing as errors of the appellate court its ruling:
I
. . . THAT THE PROPERTY DONATED BY ANGEL N. PASCUAL, JR. TO
PETITIONER AMELIA PASCUAL ARELLANO IS PART OF HIS ESTATE AT THE
TIME OF HIS DEATH.

II
. . . THAT THE PROPERTY DONATED TO PETITIONER IS SUBJECT TO
COLLATION UNDER ARTICLE 1061 OF THE NEW CIVIL CODE.
III
. . . THAT RESPONDENTS ARE COMPULSORY HEIRS OF THEIR DECEASED
BROTHER ANGEL N. PASCUAL, JR. AND ARE ENTITLED TO LEGITIMES.
IV

. . . IN NOT PARTITIONING THE ESTATE OF ANGEL N. PASCUAL, JR. EQUALLY

AMONG PETITIONER AND RESPONDENTS, AS HIS LEGAL OR INTESTATE HEIRS.
1 2 (underscoring supplied)

Petitioners thus raise the issues of whether the property donated to petitioner is
subject to collation; and whether the property of the estate should have been ordered
equally distributed among the parties.
On the first issue:
The term collation has two distinct concepts: rst, it is a mere mathematical
operation by the addition of the value of donations made by the testator to the value of
the hereditary estate; and second, it is the return to the hereditary estate of property
disposed of by lucrative title by the testator during his lifetime. 1 3
The purposes of collation are to secure equality among the compulsory heirs in
so far as is possible, and to determine the free portion, after nding the legitime, so
that inofficious donations may be reduced. 1 4
Collation takes place when there are compulsory heirs, one of its purposes being
to determine the legitime and the free portion. If there is no compulsory heir, there is no
legitime to be safeguarded. 1 5
The records do not show that the decedent left any primary, secondary, or
concurring compulsory heirs. He was only survived by his siblings, who are his collateral
relatives and, therefore, are not entitled to any legitime — that part of the testator's
property which he cannot dispose of because the law has reserved it for compulsory
heirs. 1 6 TcDIaA

The compulsory heirs may be classi ed into (1) primary, (2) secondary, and (3)
concurring. The primary compulsory heirs are those who have precedence over
and exclude other compulsory heirs; legitimate children and descendants are
primary compulsory heirs. The secondary compulsory heirs are those who
succeed only in the absence of the primary heirs; the legitimate parents and
ascendants are secondary compulsory heirs. The concurring compulsory heirs are
those who succeed together with the primary or the secondary compulsory heirs;
the illegitimate children, and the surviving spouse are concurring compulsory
CD Technologies Asia, Inc. © 2016 cdasiaonline.com
 heirs. 1 7

The decedent not having left any compulsory heir who is entitled to any legitime,
he was at liberty to donate all his properties, even if nothing was left for his siblings-
collateral relatives to inherit. His donation to petitioner, assuming that it was valid, 1 8 is
deemed as donation made to a "stranger," chargeable against the free portion of the
estate. 1 9 There being no compulsory heir, however, the donated property is not subject
to collation.
On the second issue:
The decedent's remaining estate should thus be partitioned equally among his
heirs-siblings-collateral relatives, herein petitioner and respondents, pursuant to the
provisions of the Civil Code, viz.:
Art. 1003. If there are no descendants, ascendants, illegitimate children, or a
surviving spouse, the collateral relatives shall succeed to the entire estate of the
deceased in accordance with the following articles. (underscoring supplied)

Art. 1004. Should the only survivors be brothers and sisters of the full blood,
they shall inherit in equal shares . (emphasis and underscoring supplied)

WHEREFORE , the petition is GRANTED . The Court of Appeals Decision ordering

the collation of the property donated to petitioner, Amelia N. Arellano, to the estate of
the deceased Angel N. Pascual, Jr. is SET ASIDE.
Let the records of the case be REMANDED to the court of origin, Branch 135 of
the Makati Regional Trial Court, which is ordered to conduct further proceedings in the
case for the purpose of determining what finally forms part of the estate, and thereafter
to divide whatever remains of it equally among the parties.
SO ORDERED .
Peralta, * Bersamin, Mendoza ** and Sereno, JJ., concur.

Footnotes

* Additional member per raffle dated January 6, 2010.

** Additional member per Special Order No. 921 dated December 13, 2010.
1. Records (Vol. II), p. 646.
2. Id. at 542.
3. Records (Vol. I), p. 137.
4. CA rollo at p. 29.

5. Id. at 30.
6. CA rollo at p. 47.

7. Penned by now Supreme Court Associate Justice Martin S. Villarama, Jr., and concurred
in by Associate Justices Jose C. Reyes, Jr. and Normandie B. Pizarro, rollo, pp. 21-41.
8. Id. at 37.
CD Technologies Asia, Inc. © 2016 cdasiaonline.com
 9. Id. at 40-41.
10. CA rollo at p. 138.
11. Rollo at 43.
12. Id. at 13-14.
13. III TOLENTINO, 1992 Edition, p. 332, citing 10 Fabres 295-299 Colin & Capitant 526-528;
2-11 Ruggiero 394; 5 Planiol & Ripert 67; De Buen; 8 Colin & Capitant 340.

14. III TOLENTINO, 1992 Edition, pp. 331-332, citing 6 Manresa 406.

15. III TOLENTINO, 1992 Edition, p. 337, citing 6 Manresa 413.

16. Article 886, Civil Code.
17. III TOLENTINO, 1992 Edition, p. 252.
18. It appears that its validity is in issue in Sp. Proc. No. M-3893 (for guardianship over the
person and estate of Angel N. Pascual, Jr.) before Br. 139 of the Makati RTC, vide
petition, par. 6, Record, pp. 1-4.
19. Vide III TOLENTINO, 1992 Edition, p. 341.

CD Technologies Asia, Inc. © 2016 cdasiaonline.com